New regime slabs for FY 2026-27
Budget 2026 kept the slabs introduced the year before. The new regime is the default:
| Taxable income | Rate |
|---|---|
| Up to ₹4 lakh | Nil |
| ₹4 – 8 lakh | 5% |
| ₹8 – 12 lakh | 10% |
| ₹12 – 16 lakh | 15% |
| ₹16 – 20 lakh | 20% |
| ₹20 – 24 lakh | 25% |
| Above ₹24 lakh | 30% |
- Rebate: no tax if taxable income is up to ₹12 lakh (rebate up to ₹60,000).
- Standard deduction: ₹75,000 for salaried people and pensioners — so a salary of up to ₹12.75 lakh pays no tax.
- Marginal relief: just above ₹12 lakh, tax cannot exceed the income above ₹12 lakh. On a ₹13 lakh salary (₹12.25 lakh taxable), tax is ₹26,000 including cess, not ₹66,300.
- Cess: 4% on tax plus surcharge. Surcharge applies above ₹50 lakh and is capped at 25% in this regime.
Old regime
Slabs (below 60): nil up to ₹2.5 lakh, 5% to ₹5 lakh, 20% to ₹10 lakh, 30% above. The basic exemption is ₹3 lakh at 60–79 and ₹5 lakh at 80+. The standard deduction is ₹50,000, and the rebate makes income up to ₹5 lakh tax-free. In exchange for higher rates, you can claim deductions such as 80C (₹1.5 lakh), 80D (health insurance), HRA, home-loan interest (₹2 lakh) and 80CCD(1B) NPS (₹50,000).
Which regime is better?
Tax on salary with no deductions other than the standard deduction:
| Salary | New regime | Old regime (no deductions) | Old regime (₹3.75 lakh of deductions) |
|---|---|---|---|
| ₹8 lakh | ₹0 | ₹65,000 | ₹0 |
| ₹12 lakh | ₹0 | ₹1,63,800 | ₹70,200 |
| ₹15 lakh | ₹97,500 | ₹2,57,400 | ₹1,40,400 |
| ₹20 lakh | ₹1,92,400 | ₹4,13,400 | ₹2,96,400 |
| ₹25 lakh | ₹3,19,800 | ₹5,69,400 | ₹4,52,400 |
For most people the new regime now wins. The old regime only comes out ahead with large deductions — roughly ₹4.5 lakh at a ₹10 lakh salary, ₹5.45 lakh at ₹15 lakh and ₹7.1 lakh at ₹20 lakh (on top of the standard deduction). That usually means a big HRA exemption and a home loan and full 80C.
The worked example — ₹15 lakh salary, ₹50,000 other income, ₹1.5 lakh 80C and ₹25,000 health insurance — pays ₹1,05,300 under the new regime and ₹2,18,400 under the old one.
Useful in both regimes
- Employer's NPS contribution (within the salary-percentage limit) is deductible in both.
- Standard deduction applies in both, at different amounts.
- Interest on a let-out property and certain allowances also follow common rules.
Related: work out your monthly take-home with the salary calculator, split your tax into instalments with the advance tax calculator, and check your HRA exemption if you are considering the old regime.